Interesting stories blob

It seems there is a far greater willingness on the part of lenders to pass on the recent base rate cuts to people who already own their own home, rather than to those trying to get their foot on the residential ladder. With this in mind should homeowners ask themselves whether now might be the right time to remortgage their home?

Mortgage lenders are making it harder and harder for first time buyers to get their first property; Nationwide recently decreased its loan-to-value (LTV) to 75% from 90% on some deals so that borrowers looking for a fixed or tracker rate have to find a deposit of at least 25%. Meanwhile, the last 125% mortgages also came off the market. As a result, those trying to make their first step onto the property ladder, face tough times ahead; but for those who are ready to take the next step, things are looking pretty good.

There are plenty of reasons why you might want to remortgage; one of which, of course, is to get a better deal. With the mortgage market as unsteady as it is, and rates as high as they are, it might seem like a crazy time to do it, but figures from the BBA this week have shown that re-mortgaging actually rose this month. It seems that because mortgage approvals are down, lenders have to really compete for the less risky borrowers, i.e. those who already have property and have proved that they can pay; and as a result competition for mortgage switching is high.

So, how can you take advantage of this situation if you are a homeowner? Well, if your mortgage’s introductory deal or fixed rate is about to end, you could save by re-mortgaging with another lender. This would mean you avoid going onto your current lender’s variable rate, which is bound to be higher than the one you have been paying – even just one percentage point could mean a significant increase in your monthly repayments. There are many lenders trying to get new business at the moment and who are offering attractive remortgage rates, which could reduce the amount you are paying.